Chennai, Feb 1 : The reintroduction of standard deduction for individuals while computing their taxable income will have a negligible beneficial impact on the salaried class, said a top official of an international tax advisory and accounting firm.
Finance Minister Arun Jaitley on Thursday during his Budget speech announced reintroduction of standard deduction of Rs 40,000 for the salaried class while computing their taxable income.
According to Jaitley, the move was to bring a parity between individual business tax payers who claim deduction of expenses from their income and the salaried class.
While reintroducing the standard deduction, Jaitley took away the transport allowance of Rs 9,600 and medical allowance of Rs 15,000, thereby resulting in negligible benefit, Rakesh Nangia, Managing Partner, Nangia & Co LLP, an international tax advisory and accounting firm told IANS.
According to him, the reduced corporate tax of 25 per cent for companies with a turnover of Rs 250 crore in FY 2016-17 would benefit micro, small and medium enterprises (MSME) and would also result in employment generation.
“The Finance Minister announced that in order to increase the ‘tax net’, the current limit for tax audit shall be increased, which is currently set at Rs 2 crore for business men and Rs 50 lakh for professionals,” Nangia said.
“This shall surely increase the number of taxpayers filing income tax return. But only the fine print will tell whether this shall translate into a tangible benefit for the taxpayers or will only remain an announcement,” Nangia added.